News

Future of Danville's redevelopment agency unclear

by
Jessica Lipsky

While many local agencies, programs and services have been on the potential chopping block for months, the state budget signed by Gov. Jerry Brown on Wednesday put a tentative axe to redevelopment agencies.

"There were two bills regarding redevelopment, one would dissolve our redevelopment agency and everybody else's. The second said that as long as you make an annual payment to the state, the agency would continue," said Danville City Attorney Rob Ewing. "For the immediate time, our agency is in limbo."

Danville's redevelopment agency (RDA) has spent approximately $53 million over 25 years to extend Railroad Ave., construct the library and community center, renovate the Village Theater and maintain infrastructure. Most recently, the RDA purchased a multi-million dollar building near San Ramon Valley High School as part of the downtown beautification project.

Assembly bills X1 26 and X1 27 could effectively wipe out Danville's RDA, which saw revenues of $1.6 million in the 2010-11 fiscal year. Under X1 26, RDA will be prohibited from several actions, including incurring debt, making loans and adopting or amending redevelopment plans. Those agencies that do not comply with X1 26 will be dissolved on Oct. 1, according to the California chapter of the American Planning Association.

Assembly Bill X1 27 would allow RDA to exist if the city or town participates in the alternative voluntary redevelopment program, which "requires the city to make certain specified annual payments to the county auditor for distribution to schools, fire protection agencies, and transit agencies beginning in fiscal year 2011-2012." Danville would have to take part in the program before Nov. 1.

"The way the bill is set up, that payment and it can come from entirely the redevelopment agency or the city or town can contribute to that too," Ewing said. " We've seen a preliminary number that for the first year would be $850,000 and roughly 20-25 percent off that every year after."

Because the state has until Aug. 1 to give the official numbers associated with Assembly Bill X1 27, Ewing said town officials won't be able to do much before their August council meeting. Until then, Danville will join forces with Oakland and other Bay Area cities in filing a lawsuit to try to stop Gov. Brown and the state Legislature from cutting funding for RDA.

The California Redevelopment Association and the California League of Cities will file the lawsuit with the California Supreme Court next week, challenging the bill's constitutionality by alleging that it violates Proposition 22, a measure passed by California voters last November that bars the state from taking funds that are supposed to go to local agencies. A ruling on a possible intermediate stay is expected by the end of July.

Ewing said the redevelopment bills aren't Danville's only problem, or even its biggest, with the new budget. Vehicle license fees, which are expected to account for $162 million in state revenue for the 2011-12 fiscal year, will be reallocated for local governments.

"It's taking away some of the vehicle license fees that normally go to the city's general fund, in our case about $130,000 a year. As part of that bill we might have some increased expenses for booking fees," Ewing said.

Since 2009, the vehicle license fee rate has been 1.15 percent. Of this amount, 0.65 percent goes to local governments, 0.35 percent goes to the general fund and the remainder to local public safety programs. Under Gov. Brown's budget, the fee will remain the same but only 0.5 percent will be dedicated to local purposes.

"Over the next week or two all cities are going to have to sort through all this stuff, not just the redevelopment piece, to see what the impact is on our budget," Ewing said.

If the RDA funds are not saved, then, the funds will probably end-up, either directly or indirectly, into an offshore bank account in the Cayman Islands, owned by a bunch of Goldman Sachs/Wall Street dirtbags.

Redevelopment funding, in general, needs more explanation of its intended usage and why communities merit such funds. The history of redevelopment funding is clouded and defies application to redevelopment. The story provided from press releases is lacking in definition of purpose, history and results.

Alamo is fully aware of misuse of our local parcel taxes to benefit Danville specifications for development. Alamo does not use Hap Magee Ranch Park but our parcel taxes support Danville's usage.

As you look into the scope of development and redevelopment you will find questionable usages of state and other regional funds in Danville.

The municipalities should not be in the business of real estate development. Private enterprise is best suited to take risk and meet real estate demand. Public funds should not be used to build anything; shopping centers or "affordable housing" projects. These same funds in the hands of private enterprise would produce many times the financial returns to the local community afforded through the municipality. This is another California specific fiasco.

Posted by Building owner
a resident of Danville
on Jul 5, 2011 at 11:33 am

Greedy landlords? I own a commercial building in downtown Danville and now subsidize the rents of my tenants whose incomes are down by paying building costs that were once covered by their rents. As noted, this is the way the market works. Guess what? With the town now in the commercial real estate business, you and I as taxpayers will be subsidizing the businesses the town brings in to rent in their new building by renting at below their (our) cost in order to get some kind of income which is better than no income. Like it or not, now you too have become a "greedy landlord" and will be subsidizing with your tax dollars what the market ought to be allowed to control but what instead, the town with its limitless coffers, can manipulate. Furthermore, the town will give itself permission to sidestep the building requirements all private developers must abide by. They will allow themselves to overlook parking requirements, build to the lot line, do whatever is necessary to satisfy their immediate building needs to the detriment of the surroundings. Look at the Veterans Hall. If you want a different mix of shops, ask the town to devote its resources to do something other than compete with the taxpayers who already have invested in making the downtown work.

Posted by Ron Thompson
a resident of Stone Valley Middle School
on Jul 5, 2011 at 3:58 pm

Building Owner...so I guess you like the evaporation of RDA funds, me too, not sure what your point is...it seems the days of you competing with the Town are over...but I must say, to your point, let the market dynamics unfold. To all speculators who thought they could simply make money by flipping properties and charging outrageous rents to our fine merchants I hope you guys get a haircut, as you said "let the market work"....Quizno's is vacant and they are a canary in a coalmine...

@ Building Owner-
I'm not sure exactly how much per square foot you can get (in the 2.75 to 3.50 range I'm guessing?) and I realize it depends on the size & amenities or your space, but Ron's not entirely wrong in that there are few poor commercial landlords - and plenty of them were or are speculators.
When I've used the phrase "greedy landlord" in this forum, as I have done more than once in the past, I have specific entities in mind. For example, AMG Management, who own the Livery. These fine capitalists have left spaces vacant for YEARS at a time rather than lowering their rates, and I cannot see how this isn't an example of cutting off one's nose to spite their face. But I am not implying that this is the case with you, Building owner, and I may agree with your point about competition from the City of Danville. It will depend on what they decide to rent the few run-down spaces for I suppose. Keep your chin up though; none of us want to see high vacancy rates downtown. I had not even realized Quizno's was gone.

I don't necessarily know all the details about RDA, but I do know that we have known for the past year or so that these funds were at risk in most communities - why is it that other communties 'made some changes' in how the funds were designated (no not to the Cayman Islands)so that the 'Gov't' could not take this money?

Maybe we need elected officials who understand more about what is going on the world outside of beautiful Danville.

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